Affirm Holdings, Inc. Class A Common StockAFRM

International and currency · International operations and emerging markets

Further expansion of our operations internationally will subject us to new challenges and risks. We currently operate in the United States, Canada, the U.K., Australia, Spain and Poland and plan to further expand our business internationally in the future. Managing new and existing international operations requires us to comply with new regulatory frameworks and additional resources and controls.

Credit and liquidity · Access to capital and financing

We rely on a variety of funding sources to support our business model. If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, it could have a material adverse effect on our business, results of operations, financial condition, cash flows, and future prospects.

Credit and liquidity · Credit risk and customer defaults

If loans facilitated through our platform do not perform, or significantly underperform, we may incur financial losses on the loans we purchase, we hold on our balance sheet, or that are subject to certain risk sharing agreements, which may adversely impact our financial condition and results of operations as well as result in the loss of confidence of our funding sources.

Capital structure and performance · Financial performance volatility

Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business. Our quarterly results, including revenue, expenses, GMV, consumer metrics, and other key performance metrics, have fluctuated significantly in the past and are likely to do so in the future.

Market and investment · Interest rate and yield curve risk

Further increases in market interest rates and/or prolonged periods of elevated interest rates could have an adverse effect on our business. Elevated interest rates have had, and may continue to have, an adverse impact on the spending levels of consumers and their ability and willingness to borrow money.

Customer and revenue · Customer concentration and key customer dependence

We rely on a small number of commercial partners, and the loss of any of these significant relationships would adversely affect our business, results of operations, financial condition, and future prospects. A single commercial partner, or a small number of commercial partners, may represent a disproportionately large amount of our revenue and/or GMV during any given fiscal period. The loss of, or decrease in business with, any one of our significant commercial partner relationships, such as with Amazon or Shopify, would adversely affect our business.

Market position and competition · Competitive pressure and market share loss

We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our business, results of operations, financial condition, and future prospects. Our primary competition consists of: legacy payment methods, such as credit and debit cards; mobile wallets and other pay-over-time solutions offered by companies such as PayPal, Block and Klarna; and pay-over-time offerings by legacy financial and payments companies.

Strategic execution · Merger acquisition and divestiture risks

Any acquisitions, strategic investments, new businesses, alliances, divestitures and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations. We may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all.

Innovation and product development · Product development and randd investment risks

The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies. Our solution is a technology-driven platform that relies on innovation to remain competitive. We may not be able to make technological improvements as quickly as demanded by our consumers and commercial partners, or we may not be able to accurately predict the demand or growth of our technological investments.

Supply chain and procurement · Supplier operation and dependance

We currently rely on two Primary Originating Banks to originate a majority of the loans facilitated through our platform and to comply with various federal, state, and other laws. If any of our Primary Originating Banks or Card Issuing Banks were to suspend, limit, or cease its operations or loan origination activities, as applicable, for any reason, and we are unable to engage another originating bank partner on a timely basis or at all, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

Human capital and workforce · Key personnel dependence and succession

The loss of the services of our Founder and Chief Executive Officer, as well as our inability to attract and retain highly skilled employees, could materially and adversely affect our business, results of operations, financial condition, and future prospects. Max Levchin, our Founder and Chief Executive Officer, is a valuable asset to us. Mr. Levchin has significant experience in the financial technology industry and would be difficult to replace.

Human capital and workforce · Talent acquisition and retention

Our future success is aided by our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our organization, in particular, a highly experienced sales force, data scientists, and engineers. Competition for these types of highly skilled employees is extremely intense, particularly in the San Francisco Bay Area.

Cybersecurity and data protection · Data breaches and cyber attacks

Our ability to protect our confidential, proprietary or sensitive information, including the confidential information of consumers on our platform, may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, physical or electronic break-ins or similar disruptions. The automated nature of our business and our reliance on digital technologies may make us an attractive target for, and potentially vulnerable to, cyber-attacks, computer malware, computer viruses, social engineering.

Digital transformation and innovation · Artificial intelligence and automation

Our use and provision of generative AI-powered solutions could lead to operational or reputational damage, competitive harm, legal and regulatory risk and additional costs. Generative AI may create inaccurate, incomplete or misleading outputs, reflect unintended biases, or produce other discriminatory or unexpected results, errors or inadequacies.

Industry regulation · Regulatory compliance and changes

Our business is subject to extensive regulation, examination, oversight, and supervision in a variety of areas, all of which are subject to change and uncertain interpretation. Changing federal, state and local laws and regulations, as well as changing regulatory enforcement policies and priorities, including changes that may result from changes in the political landscape, may negatively impact our business, results of operations, financial condition, and future prospects.

Legal and litigation · Litigation and legal proceedings

Litigation, regulatory actions and compliance issues could subject us to fines, penalties, judgments, remediation costs, requirements resulting in increased expenses, and reputational harm. In the ordinary course of business, we have been named as a defendant in various legal actions, including arbitrations and other litigation.

Economic and market conditions · Economic recession and downturns

Our revenue is impacted, to a significant extent, by the general economy, the creditworthiness of the U.S. consumer and the financial performance of our commercial partners. Weak economic conditions or a significant deterioration in economic conditions, including the current inflationary environment, the possibility of a recession, and uncertainty relating to the magnitude, duration and impact of tariffs on global trade, reduce the amount of disposable income consumers have.

Economic and market conditions · Inflation and deflation pressures

Economic factors such as interest rates, changes in monetary and related policies, market volatility, inflationary conditions, the imposition of tariffs on global trade, student loan obligations, consumer confidence, and unemployment rates are among the most significant factors that impact consumer spending behavior.

Economic and market conditions · Consumer spending and confidence

Weak economic conditions or a significant deterioration in economic conditions, including the current inflationary environment, the possibility of a recession, and uncertainty relating to the magnitude, duration and impact of tariffs on global trade, reduce the amount of disposable income consumers have, which in turn reduces consumer spending and the willingness of qualified consumers to take out loans.

Reputation and brand · Brand damage and negative publicity

Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects. Negative publicity about us or our industry, including the transparency, fairness, responsible lending, user experience, quality, and reliability of our platform or pay later products in general could adversely affect our reputation and the confidence in, and the use of, our platform.